BOTH EXAMINING lawyer and witness lost their cool in a Nicosia court yesterday, after it was alleged that a former associate of President Tassos Papadopoulos rubbed shoulders with cash couriers operating at the behest of the late Serbian strongman Slobodan Milosevic.
Pambos Ioannides was testifying in the case of Tassos Papadopoulos & Co vs the Financial Times.
It was the fifth hearing in a libel case brought by Papadopoulos against the paper for reporting in 2002 that his law firm had close ties with companies suspected of siphoning money from the former Yugoslavia during the 1990s.
Ioannides was a partner in the law firm at the time in question. During a previous hearing, Ioannides admitted to being friends with Borka Vucic, the woman known as Milosevic’s banker.
Yesterday the FT’s lawyer Pavlos Angelides asked Ioannides whether he knew how cash was siphoned out of Yugoslavia at the height of the UN embargo and brought into Cyprus.
Angelides read from a sworn statement made to the United Nations International Criminal Tribunal by Andreas Iacovou, former assistant manager of the Popular Bank Larnaca branch.
According to Iacovou, couriers regularly flew to the island, bringing bags or suitcases jammed with paper notes of various currencies. They were met at Larnaca airport by employees of the Popular Bank, who would assist in clearing the currency through Customs. The money was then taken to a Larnaca branch of the Popular Bank, counted, and distributed into various accounts belonging to offshore companies.
Overseeing the counting and distribution of the cash was an officer of Beogradska Banka COBU, the offshore branch of the eponymous Yugoslav bank.
Since Beogradska was a state-controlled entity, as the Financial Times contends, then these transactions must have been in violation of the sanctions imposed on Yugoslavia.
Iacovou’s affidavit reads: “Usually, the manager of Laiki [Popular Bank] branch no. 48 would receive a telephone call from Beogradska Banka COBU informing the manager that cash would arrive at the Larnaca airport… at a particular time.
“Myself or my colleagues from Laiki branch no. 48 would go to the Larnaca airport Customs Office at the scheduled time and meet the persons carrying the cash… To the best of my recollection, these persons were always ‘Yugoslavs’ who arrived on JAT flights from Belgrade.
“They carried the cash in two to five suitcases, depending on the amount of cash…On the occasions when I provided assistance, I would help the persons transporting the cash to complete the Customs Declaration Forms required by Cypriot law.
“After the suitcases containing the cash were cleared through customs, the suitcases were transported to branch no.48 ion Larnaca. Subsequently, the cash was counted… A representative of BB COBU and one of the persons who accompanied the cash…were always present in branch no. 48 while the cash was counted.
“I recall that when these cash deposits began in 1992, Mrs Borka Vucic personally came to branch no. 48 on a few occasions when the cash was counted. The representative of BB COBU who was present when the cash… was deposited gave instructions to my colleagues or myself as to which of the three Cypriot Companies should be credited with the deposit.”
Ioannides said he had never seen this statement before.
Angelides then asked the witness if he knew Andreas Iacovou. Ioannides said he did not.
The FT lawyer pursued, saying Ioannides had frequent correspondence with Iacovou. He reminded Ioannides that he signed a number of credit orders instructing the Popular Bank to transfer funds into the accounts of Yugoslav offshore companies.
The companies in question had been registered by the Tassos Papadopoulos law firm, who acted as the nominee shareholders and directors.
Several of these credit orders included the following reference: “Without mentioning where the funds are coming from.”
In one of these documents, dated January 1995 and signed by Ioannides, the Popular Bank was instructed to pay one Zoran Markovic 7 million DEM (Deutschmarks) in cash. The letter was addressed to Iacovou.
“And still you insist that you did not know Andreas Iacovou, with whom you often had contact,” challenged Angelides.
“That’s ridiculous. Our business was conducted with the Popular Bank, not individual employees. I may have met Mr Iacovou, it’s possible, but I don’t know the man personally,” replied Ioannides.
Commenting on the manner in which the cash was brought into Cyprus, he suggested there was nothing wrong, since all due procedure (customs control) had been followed.
According to Ioannides, because of the embargo on Yugoslavia, banks were forced to conduct their business in cash.
“Do you mean to tell us that bringing cash in bags and suitcases is normal banking practice? Don’t you think that’s suspicious?” asked the FT lawyer.
“I submit to you, sir, that on at least a couple of occasions you yourself were seen at Larnaca airport with the cash couriers.”
“You are a liar! And you’re playing to the journalists [in the courtroom],” countered Ioannides.
Angelides said he had this information from a person who witnessed Ioannides at the airport.
“You are vile, sir! These are despicable lies. I was never there!” shouted a flustered Ioannides, standing up and shaking his finger at the FT lawyer.
Judge Michalis Christodoulou had to cut in, appealing for calm and urging the two men to refrain from personal abuse.
But Angelides continued: “Well then, since this method of bringing the cash was perfectly normal, as you say, why did you take offence when I suggested you were there?”
“Because you are saying things about me that are not true. Your Honour, I protest,” said Ioannides, turning to the judge.
The trial resumes on Friday.
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